Commodities

Gold and silver daily review (February 14, 2013)

Contributed by Angel Broking

Gold

Spot gold prices witnessed selling pressure and ended 0.5 percent lower on Wednesday. Weak physical buying and less than expected retail sales data in US exerted downside pressure on the gold prices. Strength in the DX also added to the losses in gold prices. Additionally, investors were adopting a cautious approach ahead of the G20 meeting on Friday and Saturday this week which is expected to set the tone of forex markets.

The yellow metal touched an intra-day low of $1639.94 per ounce and closed at $1,642.4 per ounce on Wednesday. On the MCX, Gold April contract ended 0.1 percent lower. Appreciation in the Indian rupee exerted downside pressure in the MCX gold prices. Gold prices on the MCX closed at Rs. 30,554/10 gms on Wednesday after touching an intra-day low of Rs. 30,510/ 10gms.

Silver

Spot Silver prices also witnessed a selling pressure taking cues from fall in the Spot gold prices coupled with strength in the DX. Weakness in most of the base metals also acted as a bearish factor for the silver prices. In the Indian markets prices of silver on MCX witnessed a decline and ended 0.2 percent lower taking cues from fall in the spot silver prices along with appreciation in the Rupee.

The white metal touched an intra-day low of $ 30.7/oz and closed at $ 30.75 per oz on Wednesday. In the Indian markets, MCX silver prices ended 0.2 percent down and closed at Rs. 57,442/kg on Wednesday and touched an intra-day low of Rs. 57,405/ kg.

Outlook

In today's session we expect precious metals to bounce back from the lows on expectation of demand from the Asian buyers after the Lunar New year holiday along with weakness in the DX. However, investors might are also expected to adopt a cautious approach ahead of the G-20 meeting on Friday and Saturday this week which is expected to set the tone of forex markets. This might restrict gains in the precious metal prices. In the domestic markets, appreciation in the rupee might cap gains in the precious metals on MCX or even push prices downwards.